Payment deferral and instalments: liquidity under the proposal – based on the draft

Asset value would differ from cash available for payment

Under section 25(1), taxpayers would normally assess, declare and pay tax by 31 August following the tax year. The underlying asset position would nevertheless relate to the year’s final day. Payment and valuation dates would therefore differ. The proposal would not assume that every included asset became cash or generated cash receipts on the same date.

Section 26 would add a separate payment-relief system. Deferral or instalments would concern the timing of payment, not asset valuation. Liquidity difficulty would not itself reduce calculated wealth or create another exemption. The connection would allow the burden of single-payment settlement and the likelihood of later payment to be examined separately from a wealth-based tax liability, without merging those questions.

An application would require cumulative conditions

Under section 26(1), the state tax and customs authority could grant deferral or instalments upon application. Two circumstances would have to coexist: single-payment settlement would impose a disproportionately severe burden given the taxpayer’s liquidity, and later payment would be probable. The provision would link the payment burden to available financial circumstances, rather than simply to total wealth.

Section 26 would confer a power to grant relief, not an entitlement following every application. Probable later payment would remain independently necessary even where immediate payment was burdensome. The provision would supply no detailed document list, fixed evidential template or automatic assessment formula. Section 27(1) would refer to the Taxation Act and Tax Administration Act for general procedure; their unstated rules could not be reconstructed from this draft as additional relief conditions.

The fifty-per-cent ratio would be an assessment factor

Section 26(2) would require particular consideration where at least half the assets included in determining the tax base consisted of assets not directly generating the liquid funds needed for payment. The 50% ratio would therefore be an express assessment factor. An asset’s label alone would not decide the issue; the specified relationship between included wealth and a direct source of funds would matter.

Reading section 26(1)–(2) together would not produce automatic approval at that ratio. Disproportionate hardship and probable later payment would remain necessary. Equally, the wording would identify the ratio as particularly relevant, rather than an exclusive admission threshold. It would not establish that applications below it were necessarily excluded. Asset composition would thus have a prominent role without replacing the other conditions.

Twelve months, exceptionally twenty-four

Section 26(2) would set a general maximum relief period of twelve months. Exceptionally deserving circumstances could support up to twenty-four months, particularly tax attributable to residential-use property or corporate interests. Those examples would not automatically give every residential-property or share owner the longer period: exceptional justification and the basic conditions would still be required.

Section 26(3) would expressly exclude automatic instalments under section 199 of the Taxation Act for wealth-tax debts. The draft would not reproduce that external provision, so the exclusion would not justify describing another automatic scheme. Section 26 would also prescribe no universal instalment count, monthly amount or guaranteed full period. The stated months would be ceilings, not the necessary duration of every approved arrangement or independently operative payment schedules.

The tax base and rate bands would remain separate

Under section 6, the tax base would be the amount exceeding HUF 1 billion after deducting properly substantiated eligible debts from included calculated asset values. For non-residents, debts would additionally need a direct connection to acquiring, constructing, maintaining or improving the taxable asset. That base calculation would be the starting point, not the requested relief period or cash shortage described in an application.

Section 9(1) would apply 1% to the first HUF 100 billion of the resulting tax base and 1.5% above it. The HUF 100 billion band would therefore differ from the HUF 1 billion net-wealth threshold and would not establish a universal flat 1% tax. Section 26 relief would not alter that calculation. The amount arising and whether single-payment settlement imposed disproportionate liquidity hardship would remain separate questions.

Tax reductions and payment relief would serve different functions

Section 9(2) would reduce tax only for independent expert, valuation or business-valuation services mandatory under the draft. The reduction would cover half the invoiced fee actually paid during the tax year or before filing, including VAT borne by the taxpayer, capped at HUF 2 million. It would not generally deduct voluntary expert expenditure. Specified local, vehicle or corresponding foreign taxes due and paid on included assets could also reduce tax, but refundable amounts could not.

Sections 8 and 9(3) would add treaty-dependent adjustments. Where a wealth-tax treaty permitted inclusion of assets taxable in the other state, a separate tax-deduction mechanism would follow; where it prohibited inclusion, the assets would be excluded. This would not be a general foreign-asset exemption. These adjustments would determine the amount payable, whereas section 26 would address timing. Neither provision would automatically satisfy the other’s conditions or promise approval of later payment.

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